DEI Initiatives In Place for Most Supply Chains But Room For Growth Remains
Improving diversity, equity and inclusion (DEI) is an objective or goal for more than half of supply chain organizations surveyed by Gartner and the Association of Supply Chain Management (ASCM), although only a quarter have established formal targets.
In a survey of 298 supply chain professionals from November through December 2020, 59 percent reported having some form of objective to improve some dimension of DEI—race/ethnicity, gender, LGBTQ+, physical and cognitive ability, veteran status or age—and 23 percent of those organizations have a formal target or goals included in management scorecards.
Consumer and retail organizations are more likely than other industry sectors to either have a general objective for DEI or formal targets or goals. Company size plays a role when it comes to the dedication of senior leadership to improve DEI, with the largest supply chain organizations being far more likely to have DEI objectives—particularly formal targets or goals—than their smaller peers. Only 24 percent of small-business supply chains have improved DEI as an objective.
“This makes sense when you look at the social justice movements of 2020,” says Dana Stiffler, vice president analyst with the Gartner Supply Chain Practice. “The largest global companies have globally recognizable brands, so they were under a lot of pressure to take action. In a global organization, it’s more likely they’ll have a DEI officer or an HR leader that owns and cascades the DEI strategy. Where this is not happening fast enough, some chief supply chain officers (CSCOs) have designed and launched their own initiatives.”
ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE, adds, “Building a diverse workforce is essential, not aspirational. Diversity of thought, influence and input—particularly from women and people of color—is crucial to today’s global supply chains.”
Gartner and ASCM’s research also found that while people of color make up 30 percent of the overall supply chain workforce, their representation declines dramatically on the upper parts of the corporate ladder. Only nine percent of vice presidents in supply chain organizations in the U.S., Canada and Europe are people of color.
“[This] representation already starts to drop at the very first level of leadership,” says Stiffler. “Compared to the overall representation in the workforce, there’s nearly a 50-percent drop once at the manager and supervisor positions. This trend then continues in the upper parts of the career ladder.”
Eshkenazi adds, “This is a systemic issue that goes back to the 1970s, ’80s and ’90s that unfortunately isn’t unique to supply chain. As supply chain emerged as a function, many of its management and employees migrated from other functions such as finance and engineering which, due to their own narrow talent pipelines, were primarily staffed with white males. As in many fields, more progress is needed. Supply chain organizations can lead the way by creating an environment where diverse talent is valued, included and developed.”
The biggest differences in representation are not between industries, but again between organization sizes. Large supply chains with an annual revenue of $5 billion or more show greater representation of people of color than any of their smaller peers at all levels of the organization.
“In the largest global supply chain organizations, 13 percent of vice president positions are occupied by people of color compared to six percent in small businesses,” says Stiffler. “While large, global organizations clearly benefit from better access to diverse talent, they’re also putting in the work to practice inclusion in leadership development and succession planning.”
Stiffler suggests that the coronavirus pandemic has prompted a change in workplace culture which might provide smaller businesses with the opportunity to catch up. She adds, “Due to the rise of remote and hybrid work, even smaller supply chain organizations will have the opportunity to hire diverse talent, simply because the available talent pool is bigger and more diverse.”
Gartner advises that concrete actions can lead to progress and notes that once supply chain organizations have goals and objectives, those should translate into specific projects and initiatives. DEI is particularly vulnerable to statements and goals that are not always backed up by actions. Thirty-six percent of respondents said that the supply chain organization is leading initiatives, while 20 percent said their company has enterprise-wide initiatives. This leaves 44 percent who don’t have any kind of initiative or are still considering starting one.
“The most successful initiatives are those that are integrated in the recruiting and pipeline planning process,” says Stiffler. “In recruiting, that means diverse interview panels, diversity referral programs, summer internship programs for diverse students, blind resumé reviews and diverse campus recruiting. In integrated pipeline planning, it means re-designing recruiting, development, performance management and succession planning to reduce bias.”
Eshkenazi says, “Prior to the pandemic, demand for supply chain professionals exceeded supply by a ratio of six to one. This need will only continue to grow, which is why it’s critical that teens have access to education and mentorship about career opportunities in supply chain regardless of their gender or color.”